Chapter 12/Farm Cases

A Nebraska farmer says that growers need protection from bankruptcy clawback cases, Brownfield Ag News reported. Kevin Fulton, whose diversified organic farm is based in Sherman County, said he sold his entire 2020 soybean crop to Pipeline Foods LLC, only to receive a clawback letter a year later. It “said we had 30 days to pay it back, and it was a substantial amount, $140,000, but I didn’t get my soybeans back. I just had to pay them back the money,”  Fulton said. “I contacted some attorneys, and was basically told that law is legitimate, and they have the right to do that.” Pipeline Foods filed for bankruptcy in July 2021, and current law allows a trustee to recover assets or their value from a debtor who may have made unfair transfers within 90 days before the filing. Fulton said that the lengthy legal process had an impact on his operation. “They said if we went to court that I would most likely lose, so I would have to pay back probably the whole amount plus a lot more in attorney fees. So, it probably would have cost me several hundred thousand dollars,” Fulton said. “We negotiated it down and I ended up paying them $50,000, which is still a pretty big hit.” He says his story can happen to anyone. “It doesn’t just affect organic farmers; it could be anybody that sells grain. And it’s not just grain,” he added. Fulton says he wants to bring more awareness to the issue, and hopes lawmakers incorporate farmer clawback protections in any new farm bill. Numerous farmers this month received similar clawback letters in the bankruptcy proceedings of Iowa-based Global Processing Inc.

Agriculture Secretary Tom Vilsack has a line about the state of small-scale agriculture in America these days, the New York Times reported. It’s drawn from the National Agricultural Statistics Service, which shows that as the average size of farms has risen, the nation had lost 544,000 of them since 1981. “That’s every farm today that exists in North Dakota and South Dakota, added to those in Wisconsin and Minnesota, added to those in Nebraska and Colorado, added to those in Oklahoma and Missouri,” Vilsack said last spring. “Are we as a country OK with it?” Even though the U.S. continues to produce more food on fewer acres, Vilsack worries that the loss of small farmers has weakened rural economies, and he wants to stop the bleeding. Unlike his last turn in the same job, under former President Barack Obama, this time his department is able to spend billions of dollars in subsidies and incentives passed under three major laws since 2021 — including the biggest investment in conservation programs in U.S. history. The plan in a nutshell: Multiply and improve revenue streams to bolster farm balance sheets. Rather than just selling crops and livestock, farms of the future could also sell carbon credits, waste products and renewable energy. “Instead of the farm getting one check, they potentially could get four checks,” Vilsack said. He is also helping schools, hospitals and other institutions to buy food grown locally, and investors to build meatpacking plants and other processing facilities to free farmers from powerful middlemen.